Grayscale Research expects Bitcoin to set fresh all-time highs by 2026, challenging concerns that the world’s largest cryptocurrency may be headed for a prolonged downturn.
The firm’s latest outlook argues that Bitcoin’s price action is no longer bound to the traditional four-year halving cycle many investors view as a market compass.
In a report published Monday, Grayscale said Bitcoin is unlikely to follow the so-called “four-year cycle,” a theory suggesting that prices peak and then undergo a deep correction in predictable patterns tied to each halving. Analysts at the firm contend that this model may be weakening, and that Bitcoin has room for new gains as early as next year. “Despite natural market uncertainty, we do not see the four-year cycle as the primary driver of future price direction,” the report noted.
Bitcoin has endured sharp volatility since early October, falling as much as 32% from its November highs. The asset briefly touched $84,000 on Monday before recovering to about $86,909 as of 2:20 a.m. ET on Tuesday, according to data from The Block. Yet Grayscale emphasized that long-term investors historically benefit from patience, adding that pullbacks of 25% or more do not automatically signal the beginning of a prolonged bear market.
The firm highlighted several reasons why Bitcoin may be diverging from traditional patterns. Unlike previous cycles, this year’s market has not produced the type of euphoric, parabolic rally that typically precedes major reversals.
Institutional capital is increasingly concentrated in exchange-traded products and digital treasury assets, a shift from the retail-driven spot trading that defined earlier cycles. And on the macro front, expectations of interest-rate cuts and momentum behind U.S. crypto legislation continue to provide support.
Tom Lee, CEO of BitMine and a long-time Ethereum treasury manager, echoed Grayscale’s view. He pointed to a widening disconnect between market fundamentals and recent price action. “Crypto prices have dropped sharply even as fundamentals—wallet activity, trading networks, fees, and digital assets—continue to improve,” Lee wrote on X, calling the current risk-reward profile attractive for both Bitcoin and Ethereum.
Speaking to CNBC, Lee said he remains bullish and expects Bitcoin to set a new record high by January next year.
